Tuesday, September 17, 2013

Twitter Joining The Stock Market Floatation: Caveat Emptor?

Given that Facebook’s stock value never went higher than its initial floatation, should prospective investors exercise caution when jumping on the Twitter IPO bandwagon? 

By: Ringo Bones 

Even though Twitter’s eagerly awaited IPO / stock market floatation was announced late last Thursday, September 12, 2013, many institutional investors seem to be exercising restraint when it comes to jumping on the Twitter bandwagon after the top brass running the very popular social media site decided plans to monetize their current popularity. Maybe it was because of Facebook IPOs never regaining their initial floatation value since released over a year ago. But will Twitter buck the trend and manage to do a miracle – i.e. be a better social media site IPO than Facebook?

It may seem not that long ago that Twitter founder Jack Dorsey made his first ever Tweet back in 2006 that Twitter became the social media site of choice of alleged pathological narcissists. Mollycoddling excuses aside, when seen for its mere advertisement revenue potential – Twitter is worth about 10 billion US dollars – about a quarter that of Facebook. And with 200 million plus users – a fifth that of Facebook – many wonder if investing in the upcoming Twitter IPO is a genuinely economically viable move. 

Twitter is slated to earn over 528 million US dollars via advertisement revenue this 2013. Many see it as a better investment than Facebook due to the high profile users currently on it. As in US President Barack Obama and the rather somewhat unsavory types like disgraced NYC mayoral candidate Anthony Weiner who Tweeted photos of his privates. But will the resulting IPO money might blunt Twitter’s edginess factor in comparison to Facebook? After all when Facebook got its IPO and tried to “proverbiably” clean up its act by strictly policing posts – i.e. putting sanctions not just on “alleged pornographic posts” but also on “controversial” political posts like Uyghur Statehood Movement posts, Free Liu Xiaobo posts, Tibetan Freedom posts, etc. Might Twitter suddenly become a proverbial “police state” like Facebook once the millions of IPO revenues comes pouring in?  

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